Volkswagen had some great news for investors and share holders this week.
Volkswagen Group, which owns a number of recognizable auto brands, announced that operating profits increased 22% in 2019. That translated into $18.5 billion in operating profits, up considerably year-over-year compared to 2018. The strong financial performance comes from strong sales of high-margin cars, plus lower diesel charges, according to Reuters.
VW continues to ramp up sales of SUV models. Not only are they incredibly popular with consumers, but they produce better profits than traditional models. In 2018, under 25% of Volkswagens sold were SUVs. The company plans to vault that number above 40% in the coming months. Overall, VW expects sales to increase 4% in 2020. They project total units delivered to be just shy of 11 million, in line with their 2019 sales. Of course, the entire auto industry is currently struggling due to the Coronavirus outbreak. It remains to be seen how much it will impact VW’s 2020 projections.
Another helpful line item for VW is the decreasing fines stemming from Dieselgate. The company’s fines and settlement costs dropped roughly a billion dollars in 2019, adding directly to operating profits. In turn, the company’s stock dividends increased by a proposed 35%. The company hiked dividend amounts to €6.50 per ordinary share from €4.80 per share the prior period
U.S. sales increased 2.4% year-over-year. Volkswagen sold 653,813 light vehicles in a market that fell overall by 1.2%. These sales include the complete VW portfolio, which also incorporates Audi, Porsche, Bentley. and Lamborghini. Notably, Buggatti’s sales numbers were excluded.
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